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B-209992.2,B-209992.3 1 (1983-11-21)

handle is hein.gao/gaobadlkq0001 and id is 1 raw text is: a 'e THE COMPTROLLER GENERAL OECISION OF THE UNITED STATES WASHINGTON, 0.C. 20548 FILE: DATE: November 21, 1983 B-209992.2, B-209992.3 MATTER OF: Gallegos Research Corporation-- Reconsideration DIGEST: Recommendation that options in 8(a) contract awarded to firm whose participation in 8(a) pro- gram would expire during first year of performance not be exercised unless firm continued in 8(a) program is clarified. Options may be exercised subject to requirements of regulations for justi- fication of exercise of options. The Small Business Administration (SBA) and the OAO Corporation (OAO) have requested reconsideration of a recommendation we made in our decision Gallegos Research Corporation, B-209992, April 11, 1983, 83-1 CPD 376. In that decision, we denied a protest against the award of a contract to OAO under section 8(a) of the Small Business Act, 15 U.S.C. § 637(a) (1982). OAO's participation in the 8(a) program was scheduled to expire during the first year of performance and the contract provided for three option years. We found that the exercise of the options would effectively permit OAO to continue an 8(a) contract for 3 years beyond its eligibility for participation in the 8(a) program and recommended that the options not be exercised unless OAO continued to be an eligible 8(a) firm. The SBA contends that implementation of our recommenda- tion would disrupt SBA's efforts to provide an orderly transition for graduating 8(a) firms into participation in competitive procurements and the commercial marketplace. Further, SBA argues that to limit the exercise of options on 8(a) contracts would discourage procuring agencies from reserving their requirements for the 8(a) program when certain contract work is required over several years. Moreover, Air Force states that it would exercise the options only pursuant to the DAR § 1-1500 criteria. Our recommendation has been subject to a broader interpretation than intended. It was our intent only to preclude the continuation of an 8(a) contract--as an 8(a)

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